CDXLIII – The Bread Standard

When you water your brain good thoughts grow, that is why people have shower thoughts. Such is the inception of the subject of this post: The Bread Standard.

The root of the thought was this: I recalled my introductory accounting classes where the question of “what is money” was brushed aside in favor of “how is money used”–the answer being ‘as the means of exchange’. What money is, is very important because it reveals the philosophical underpinnings of the economy. Zippy famously tried to answer this question by saying that money is tax vouchers. I disagree, and as an alternative I suggested that money is a unit of the delegated authority of the sovereign.

What follows from this is that I wanted to think of a simple analogy or otherwise how to explain my model of currency to a child, or someone uninterested in finance. I began by suggesting the starting point is that the Sovereign is responsible for providing all the needs for his subjects, but because that is impractical he issues vouchers redeemable for some unit of value. Issuing a token that says “One Dollar” on it doesn’t mean much in a vacuum, this is why proponents of the gold standard try to substitute Gold. It makes the logic go something like this: This slip of paper that says “one dollar” is tradeable for one ounce (lets say) of Gold. So now you are not trading “dollars” but you are trading gold by proxy. But what the Sovereign is really concerned about is the necessities of his subjects, so what if he made the slip of paper that says “one dollar” tradable for one loaf of bread?

The great thing about a Bread standard is that it lines up with the idea of “purchasing power parity“, which compares world currencies by comparing how many local bucks it costs to buy some standard commodity–bread being a common comparison. If it costs $5USD to buy a loaf of bread in America, and it costs ₱500PHP to buy a loaf of bread in the Philippines, then $5=₱500, and a ‘colloquial’ exchange rate can be reasoned. If we had a Bread Standard, then 1 Bread Buck would always buy one loaf of bread, so that would make comparing bread bucks to other countries relatively simple.

Within a country like, for example, Scootland, Bread Bucks could be valid stand-ins for bartering with loaves of bread. If you need a wagon, if you need a mule, if you need a car, if you need gas–how much current or future bread would it be worth to you to trade for it?

This calculation makes the economy begin to make a lot more sense. It explicitly refers to the Sovereign providing necessities for subjects, it expresses what the basic necessity of the subjects is (bread) and it facilitates trade so that you aren’t just trading hypothetical “Scootbux”–how do you value that?–but you are trading the authority to buy for yourself one loaf of bread.

I don’t know that I have succeeding in creating a simple explanation, but I really like the idea of a Bread standard.

What follows is just a fun (for me) breakdown of Bread based currency:

฿1 Sovereign, colloquially known as a Loafer
߿1 Tenth, colloquially known as a Slice
10߿ make ฿1, or 10 Slices to the Loaf
2߿ are known colloquially as a Sammy

AMDG

CCCXLII – Anyway, Gold

And now for something completely different. Let’s talk about Gold.

My previous post on Gold was inspired by a conversation with Wood. I went through a series of use cases for Gold. Gold as investment, Gold as Specie, and the Gold Standard. But I got the sense at the time that none of those things were what Wood was talking about. A recent comment at his space put the thought back in my brain and several days later it clicked.

As I commented there, the idea is this:

We humans have a seemingly intuitive sense of the value of Gold. It has properties which lend itself very well to specific uses–liturgical, economical, generally as a means of glorification. In my previous post I dismissed all of these as utilitarian.

But I forgot something important. Gold’s existence isn’t an accident. God made gold. And furthermore, God specifically requested Gold when he was describing how to build the Ark of the Covenant. God, the author of all things, chose Gold. It wasn’t an arbitrary choice either, God is not arbitrary. It wasn’t because it was meaningful to us, either, because God doesn’t care what we think. God chose Moses not because he was well respected by the Pharaoh, but because he was the man God needed at the time and place God needed him. God put him there so that God could use him. Like leaving a pen on your desk so you remember to write that letter when you come back to it.

So God made gold. That implies that there is something about gold that is valuable to God, beyond just gold qua creation, but gold as an instrument of glorification.

We recognize this aspect of gold and we use gold to glorify things other than God today, because we recognize that value.

So let’s assume there is something metaphysically special about gold. What does that tell us?

Well, Moses is a decent example, as are any of the prophets. Mary even. God chose a specific person out of an infinity of persons to serve Him in a very specific way. God chose the person both because they were designed for that purpose and because they were uniquely gifted at that purpose. Gold was designed to glorify God, and is also uniquely good at glorifying God.

The attributes that make gold good at glorifying God also make it good as a token of currency. Just like Moses might have been chosen by God to lead the israelites out but that doesn’t mean his recipe for a bean casserole was also immaculate. Moses had other uses than the specific task chosen by God, but he was uniquely qualified for the task chosen by God.

This doesn’t change much our calculus of Gold as specie or as an investment. In fact, it probably adds some urgency to them: if we surround the things we glorify with Gold, what does it say that we are surrounding ourselves with Gold? Surrounding our bank account with Gold?

If we want to build up our treasure in heaven, one God approved method of doing that is to give God your gold. I’ve seen Churches that don’t have Gold tabernacles and while it may not be formally disallowed, but I personally don’t like it as a house for God. Let’s fill it with Gold.

This is an interesting thought experiment, and I am sure I have missed some of the less utilitarian aspects, but please use the comments to tell me what I’ve missed!

AMDG

CCLXXX – What If I’m Wrong?

In my previous three articles on the Sovereign and Property, I treated it as a given that currency is a token of authority delegated from the sovereign. I know this is not the conclusion Zippy came to, so for completeness’ sake I want to explore why that might be and just generally think about ways this whole idea might be a complete waste of time. And so, in no particular order:

NB: Each of these Errors should be taken as an independent argument contra my previous articles and not a combined case.